Why isn’t my APR stable?

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5 min readApr 7, 2022

One of the more confusing things when you’re getting into $MAGIC is figuring out just how much you will be earning from staking.

$MAGIC isn’t your typical coin. There are a number of intricacies which make it mysterious, but very appealing. In brief, the dynamics which affect your APR are:

Onboarding of new projects
Royalties from marketplaces
Boost rate
Harvesters

Fixed amount of emissions

First of all, it is important to know the origins of $MAGIC. One-third of the total supply of $MAGIC was emitted during the first 4 week staking period, which set a hard cap of 347,714,007 tokens.

One interesting characteristic of $MAGIC is that these emissions get cut in half every year (called a “halvening”, like Bitcoin) to make the token increasingly scarce:

A summary of the emissions so far:

This information can be found in Treasure’s docs

Now what does this mean for your APR? Given $MAGIC’s capped emissions, it should be easy to predict your return when staking. However, there are a few other factors at play.

Onboarding of new projects

A key value proposition of the Treasure ecosystem is the creation of composable metaverses. In layman’s terms, this imagines ecosystem projects as Lego blocks. They can build on top of Treasure, using its resources, but also branch out with their own vision and direction.

Treasure borrowed this idea from composable lending platforms in DeFi where an asset on one platform could be deployed to another platform for an added utility. More about how liquidity in DeFi is evolving in the next article.

Now, in order to onboard new projects, you need to bootstrap them. You can’t just expect them to join your ecosystem and contribute without some incentive.

So Treasure kicked off with high emissions to bootstrap projects and onboard users. And what does this mean for your APR?

Treasure passed a governance proposal (details here) which states that a share of these emissions will be diverted to new projects in order to accelerate their growth.

This means that your APR will get reduced by 50% for 2 weeks out of every 3 months, in order to provide funding to new projects, games, and communities building within the $MAGIC ecosystem.

You may be thinking “isn’t it bad if my APR goes down?! Doesn’t that mean I earn less??”

Well, yes and no. To really understand this concept, we have to dive a little bit deeper into what actually makes a token like $MAGIC more valuable over time.

The virtuous cycle

One thing to remember is that attention spans are extremely short-lived in Web3 these days. Market participants will hop from one project to the next with little loyalty to any one concept.

“The gravity of a metaverse is simply consensus that it exists.”
— TreasureDAO Liquidity Abstraction

When we lose attention, we lose gravity. Gravity is critical for the existence of this ecosystem.

Creating a virtuous cycle of onboarding new projects with new concepts is an attempt to solve this issue. It creates a feedback loop in which the new partnership projects are bootstrapped by a reputable ecosystem (Treasure) and in turn provide value to the ecosystem through attention, users, and token use cases.

Essentially an economic flywheel.

So while the APR may decrease temporarily, the long term demand for MAGIC increases. Couple this with increasing scarcity and you have a strong bull case.

This of course depends on the success of partnership projects. See the assessment criteria and submission process for more details.

Royalties, royalties, royalties

It all comes down to the earnings.

When these new projects integrate with the existing Treasure ecosystem, $MAGIC stakers will also benefit. 33% of marketplace royalties, both from the official primary Treasure Marketplace (in $MAGIC) and from the generic Trove Marketplace (in ETH).

What is a boost?

So we’ve established how the base APR fluctuates as new projects are onboarded. Now let’s look at how individual APRs can increase.

$MAGIC ecosystem NFT assets like Treasure and Legions allow you to increase your yield. When staking, each NFT you own applies a multiplier to your APR. This multiplier is referred to in percentage form as “boost”. Increasing the time lock of your assets also increases the boost.

Boost does not = APR.

It is an added percentage onto your base APR. So if we assume that the base APR is 6% and you get a 100% boost, that means your APR is now at 12%.

However, there is a limit on the amount of NFTs you can use to increase your boost. Boosts can stack up to 3 Legions and 20 Treasures. The max time lock is 1 year. The highest possible boost is 2116%.

Harvesters: Social coordination

Collective incentives and game theory for better yields — this deserves an entire article of its own, but let’s do a TL;DR here.

Harvesters compete directly with the Atlas Mine for emissions. They will also provide higher APRs but require more resources and have limits of their own.

Yield dynamics

So now you see, TreasureDAO is attempting to solve a complex problem of attention and loyalty of liquidity that none have attempted before. Collective incentives drive group dynamics for more sustainable growth.